Sometime in the past a lot of lava has run down from some volcano and this lava makes today one of the banks of the river Sogid. In this lava a lot of trees (i.e. Icelandic trees, usually called bushes) has been growing and it has been very popular to build sommer houses there.
This picture is taken from the mountain Búrfell and shows well all those sommer houses in this lava, which in fact make a small village during the sommer when people spend a lot of their free time there.